Apple now okays cheaper subscriptions outside the iOS ecosystem

Thu, Jun 9, 2011


Well it appears that Apple’s app store guideline adjustments extend far beyond the new restriction on DUI checkpoint apps.

Back in February, Apple’s stance on in-app subscriptions generated a fair amount of controversy for a number of reasons, one of which was Apple’s requirement that publishers offer iOS subscribers the same type of deals made available to print subscribers. The underlying reason is that new subscribers that sign up from within the iOS ecosystem nets Apple a 30% cut whereas subscribers that originate elsewhere effectively keeps Apple out of the profit loop.

Commenting on this practice a few months ago, Apple CEO Steve Jobs explained.

Our philosophy is simple. When Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing.

So Apple’s rule was a means to prevent publishers from offering more attractive deals to potential subscribers outside of the app as to avoid giving Apple 30% of all subscription monies.

But now Apple has had a change of heart.

Whereas section 11.13 of Apple’s iOS developer agreement used to demand that content available outside of the app must also be “in the app using In-App Purchase at the same price or less than it is offered outside the app”.

The revamped section, now 11.14, reads:

Apps can read or play approved content (specifically magazines, newspapers, books, audio, music, and video) that is subscribed to or purchased outside of the app. Apple will not receive any portion of the revenues for approved content that is subscribed to or purchased outside of the app.

While this is undoubtedly good news for publishers, for some, the news is too little too late. 9to5Mac writes:

In all, that’s good news for the likes of Hulu, Amazon, Netflix, eBay and other companies which rely on content subscriptions. On the downside, it’s a little late for e-books publishers like BeamIt Down Software which closed down the shop, arguing it couldn’t sell books at a loss due to Apple’s 30 percent cut on iOS subscriptions…

That Apple is now reverting the rules of the game comes as little consolation to a five-people team of BeamIt Down Software who have invested over $1 million in cash and spent nearly eighteen months developing the iFlow Reader app. The company ceased operations on May 31 and is no longer providing support or updates for the reader app. “They screwed us”, BeamItDown Software’s Philip Huber told Fortune.

In any event, the bottom line here is that publishers can offer in-app subscriptions at any price they want, regardless of offers made available outside of the iOS ecosystem.


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